If you are taking care of your companies sea freight imports to Australia the process attached can seem quite tricky. If you are outsourcing the sea freight importing then you leave all these tasks to your sea freight forwarder. We believe giving you transparency and insights in how the process works gives you a better understanding of why your freight forwarder asks for certain information and why the process takes the time it does.
Read on to learn about the overall import sea freight process and to get detailed information on important documentation, Customs and Quarantine procedures.
The 10 steps of the Import Sea Freight Process
The import sea freight process in general consists of 10 steps, depending on the goods you are importing, and the country you are importing to Australia from. There are exceptions we will not go into detail about, please always discuss them with your international freight forwarder.
So basically we are looking at the following steps:
1. Origin Booking – The shipment is usually booked at the origin, e.g. Shenzen for an import from China to Australia.
2. Origin clearance, loading, trucking – The goods are cleared, loaded and trucked to the vessel.
3. Sea Freight – The freight is shipped to the Australian port of destination
4. Docs issued - The required documentation is issued and handed to the shipper and / or the importer. Please find more information in the below section “Required documentation for importing sea freight to Australia”.
5. Arrival at wharf – Freight arrives at the Australian destination sea port, e.g. Brisbane, Sydney, Melbourne, Adelaide, Fremantle (Perth), Townsville.
6. Import clearance – Import clearance should be underway prior to arrival at wharf. By doing as much as possible in advance it will make for smooth arrival and a fast release.
7. Customs / Quarantine – Depending on the type of goods duty may apply and certain Quarantine actions have to be taken. Please find more information in the sections "Customs" and "Quarantine" below.
8. Wharf availability - The window advised by the terminal for each vessel in which freight must be collected in order to avoid storage penalty. Please find more information in the seciton "Terminals" below.
9. Delivery to site – The freight is delivered to the importers site.
10. Return empty container – After containers have been emptied they are returned. At container parks they are parked until being reused by carriers.
The Import Sea Freight Process figure shows how each of the mentioned steps correlates.
Below we will explain some important points in the import sea freight process in more detail.
Required documentation for importing sea freight to Australia
The documentation generally consists of the commercial invoice, the packing list, quarantine packing declaration and the Bill of Lading. Depending on Customs / Quarantine regulations for the particular commodity you would like to ship, e. g. used machinery, additional documents may be required. Your international freight forwarder will be able to advise you on that.
Bill of Lading
Since the Bill of Lading is a very important document we will go a bit more into detail on it. The Bill of Lading is the evidence of the contract of carriage entered into between the ‘Carrier’ and the ‘Shipper’ or ‘Cargo Owner’ to transport as per the contract between the buyer and the seller. It can serve as a proof of ownership (title) of the cargo, and may be issued either in a negotiable or non-negotiable form.
We generally use two types of this document; Original Bill of Lading and Express Release Bill of Lading.
Original Bill of Lading, which is the standard for international shipping, is produced when the freight is ‘laden’ on board of the ship at origin and is handed to the shipper. Mostly once the shipper has been paid he releases the cargo and the Original Bill of Lading is sent to the importer which he needs to receive the freight. Without the document the freight would not be released to the importer. Since the document has to be sent first, this process may be quite slow. As an option an electronic message is sent from the origin office of the shipping company to the destination office, informing about the turned in Original Bill of Lading.
The quickest variation is the Express Release Bill of Lading, also known as a seaway bill. In this case the shipper releases the hold on the cargo immediately. This means, an “original” never gets issued. The shipper only receives a copy of the Bill of Lading for their reference the moment the freight is laden on board of the ship. This way the freight is released as soon as it is available at destination. Also no further courier fees occur, document copies are sent electronically.
Patrick, DPW and Hutchisons operate container terminals at the major Australian ports (Brisbane, Sydney, Melbourne and Perth/Fremantle). A slotting system is used by the stevedores to control import/export road movements, which is accessed by transport providers. There is some variation between operators, however typically slots need to be booked up to 3 days in advance.
Once the vessel arrives and containers are unloaded, a 3 day window is advised in which all containers must be collected, otherwise costly wharf storage can be incurred (unfortunately they usually include weekends in this time). Containers must be Customs cleared prior to wharf removal or can only be held in ‘underbond’ storage, meaning they will be stored but still need to be Customs cleared.
Sea freight carriers have limitations when you must return their empty equipment by. These timeframes are variable by carrier and contract. Typically there are about 10 days of wharf availability, however some only provide 7 days. The amount sea freight carriers charge for detention also varies, however it is always quite expensive and increasing with time.
Import Consignments valued over A$1000 will be assessed for Customs duty and taxes. The rate of duty to be imposed is based on the classification of the item in the Customs Tariff.
Duty rates vary from 0% to 10%, however most goods attract a 5% rate of import duty, unless item is duty free in itself, there is an Free Trade Agreement in place or a Tariff Concession exists.
Where duty is payable it is calculated on the Customs Value of the Goods (Cval) which is roughly equivalent to the FOB (Free On Board) price. There are exceptions to this and we ask you to please talk to your freight forwarder about this.
GST, currently 10%, is calculated on the value of the taxable import (VoTI). This total is the Cval of the goods, plus duty, plus overseas transport and insurance (T&I) combined.
Import GST can be either paid at the time of importation or deferred with approval from the ATO. For further information regarding eligibility and application please check the Deferred GST Scheme on the ATO website.
Entry Processing Fees
Even if goods are duty free and you are GST deferred, there are still electronic lodgement fees payable to Customs / Quarantine on import, paid per container. Furthermore an Import Processing charge (depending on the value of the sea freight shipment consignment) and a Quarantine fee – both paid per entry – will be added on top.
Quarantine activity can be commodity based or random. It is concerned with risk assessment relating to commodity and non-commodity concerns (wooden packaging, containers, etc.).
ICON is the Department of Agriculture's (DoA - formerly AQIS/DAFF) Import Conditions database. It can be used to determine if a commodity intended for import to Australia needs a quarantine permit and / or treatment or if there are any other quarantine prerequisites.
If Quarantine action is required following arrival there can be associated fees applicable for additional transport/handling, requisite treatments or Inspections.
Shippers must be very careful to avoid cargo being contaminated with quarantine risk material.
Packing declarations are required for import sea freight and must be filled in accurately on the shipper’s letterhead.